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How Do Medicare Private Fee For Service Plans Work?

When choosing between Original Medicare (Medicare Parts A and B) and Medicare Advantage, enrollees have many decisions to make regarding their benefits. However, those who decide to go with Medicare Advantage will still need to make additional choices in terms of how their benefits are structured.

Medicare Advantage plans typically offer care to enrollees via their network of providers and they are typically identified as HMOs (Health Maintenance Organizations) and PPOs (Preferred Provider Organizations).

Medicare Advantage PFFS plansOne such plan is the Private Fee for Service Plan, or PFFS. These types of plans offer Medicare approved private insurance coverage. With PFFS plans, Medicare will pay the plan for Medicare approved services, while the PFFS plan determines – up to a certain limit – how much the participant must pay for their covered services.

PFFS plans do not require their participants to choose a primary care physician, nor do enrollees need to obtain a referral in order to see a specialist. In a Private Fee for Service Plan, the enrollee is usually responsible for the difference in cost between the amount that is paid for by Medicare and the amount that the health care plan charges.

With a PFFS plan, a participant can in some instances obtain his or her health care services from any doctor or other health care provider that is Medicare approved – including those that are considered out-of-network – although they will pay more for out-of-network providers’ services.

There are also some Private Fee for Service plans that offer coverage for prescription drug benefits. If a person’s PFFS plan does not provide this coverage within the plan, the enrollee will be allowed to join a Medicare Part D prescription drug plan in order to obtain it.

It is important to note that, as with other types of Medicare Advantage plans, enrollees in a Medicare PFFS plan are still in the Medicare program, meaning that they will still get all of their Medicare covered services, as well as all of their rights and protections under the Medicare plan.

There are several criteria that will determine the costs incurred by an enrollee in a Medicare Private Fee for Service plan. These typically include:

  • Which Medicare PFFS plan that is chosen
  • Whether or not the PFFS plan will charge an additional amount of monthly premium
  • How much is being charged by the plan for the enrollee’s services
  • Whether or not the PFFS plan allows doctors and other health care providers to bill participants more than the plan pays – up to a certain limit – for its services.
  • How often the enrollee obtains his or her health care services
  • The type of health care services that are obtained by the enrollee
  • Whether the health care providers that are seen are in-network or out-of-network

In any case, it is important to read over all of the plan benefits prior to enrolling in a Medicare Private Fee for Service Plan. That way, costs and eligibility will be more clear when the time comes for visiting health care providers.

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